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 You are in: Under Secretary for Economic, Energy and Agricultural Affairs > Under Secretary's Remarks > 2001 Under Secretary for Economic, Energy and Agricultural Affairs Remarks

The U.S. and the European Union

Alan P. Larson, Under Secretary of State for Economic, Business and Agriculture Affairs
Remarks in Press Conference at the U.S. Mission to the European Union
Brussels, Belgium
December 12, 2001

The relationship between the EU and the United States is as strong as I can remember in the 28 years I have been working on these issues. We have appreciated very much the cooperation that the European Union and the United States have enjoyed in the area of counter-terrorism activities. That is something we have worked on for a long time, but the intensity and the depth of that have really stepped up since September and there are some very, very significant fruits of that cooperation that are coming along.

Secondly, in the trade area, I was at Doha myself and was really pleased to be part of an American team that worked very closely with the EU team in bringing about launch of a new round of trade negotiations. I think the cooperation on that began months before Doha, and it involved working through issues where we have differences of opinion as well as issues where we have common opinions; but it also involved cooperation on the diplomacy of getting consensus from a group of 142 countries, which is not an easy thing to do.

And then, third, we have been working together on a lot of important international issues; the re-building of Afghanistan is but the latest where there has been some very close cooperation. The United States hosted a conference to kick off this process in November and the European Union agreed not only to serve as co-chair of the process along with Japan and Saudi Arabia and the United States, but agreed to host the next meeting, which is going to be held in Brussels next week.

So there has been a lot of good things going on. At the same time, you donít keep on top of issues unless you really are working hard to address outstanding problems, and I have thought there really are a couple, one on each side, that really demand urgent attention. We have been very attentive to the fact that a number of our trading partners, and the European Union in particular, you might say, have said that it is very important to them that the United States move forward with Trade Promotion Authority and that is why we did press the case for Trade Promotion Authority in the Congress. There was a vote last week in the House of Representatives, 215 to 214, there was a lot of heavy lifting, a lot of people voted for Trade Promotion Authority for the very first time and it was a real strong effort led by the President. We are looking for a mark-up in the Senate today.

On the EU side, my candidate for the significant issue that really needs to be addressed in a similar prompt, urgent way with real political effort is the issue of biotechnology. We have been deeply concerned for over three years at the halt of the approvals process -- something that to our way of thinking is contrary to the EUís own regulations and laws. It is something that has denied us a corn market in the European Union for those same three years. Beyond that, though, it is something that risks isolating Europe in an area where there is technological development that has great potential to help resolve world hunger problems, something that it is a technology that we believe is of great value to the developing countries. In fact, the G-8 countries agreed last summer in Genoa that we should be working together to help make this technology accessible to the developing countries and weíre doing that. We have doubled our bilateral assistance program for biotechnology. We are engaged in a number of projects around the world to build capacity in these countries so they can adapt this technology to their own particular needs, make it technology that can help products or crops grow in arid conditions, or that can help disseminate Vitamin A through products like Golden Rice. We just see this as a very, very important issue and one that needs to be addressed promptly. I think I will just leave it at that and I will be happy to respond to any of the questions you have got. 

Question: As you are probably aware, the ban on GMOís will likely continue for another two years. Is the United States going to wait for these two more years before taking this matter up in the World Trade Organization?

Under Secretary Larson: Well, I am not prepared to accept the premise that there will be no process of approvals for two years. As I said at the outset, that situation would be contrary to the EUís own laws and procedures. I think it would be contrary to the EUís own interest as well. It is therefore urgent for the EU to find a way to move forward (with) the approval process.

Question:...(inaudible)...the Commissioner herself (Commissioner for Environment, Margot Wallstrom) said that it would take at least two years before a liability scheme would be in place, if not longer...

Under Secretary Larson: What I am saying in response to that assessment is that a lot of people said we couldnít get fast track to the Congress. It took a very strong political leadership at the top to get it done. I cannot comment on what is or is not political reality. I am just suggesting that reality needs to be changed in such a way that this process of approvals can move forward, and move forward quickly.

Question: Who are you going to see during your visit here and what your message will be...

Under Secretary Larson: We are going to see Commissioners Byrne and Liikanen and we are going to be seeing (officials in) the cabinet of Commissioner Wallstrom, she is got a fairly busy day herself today with the Environmental Council. We will be seeing a number of other EU officials.

Question: So you have been saying that the approvals process must be moved on. How do you hope to influence that? Are you going to make threats? Are you going to cajole?...

Under Secretary Larson: I am expecting to have some really candid conversations with members of the Commission and senior officials here who have been working on the biotechnology issue and then the approvals process in particular. We know that there is an interest on the part of a number of Commissioners and other senior officials to move this process forward. We want to get their appreciation of the situation. Urge them to move as quickly as possible, give a sense that we feel a real urgency about this.

In addition we will want to talk about the proposed regulations with respect to traceability and labeling and the traceability of food and feed products. It happens that there were discussions in the WTO about that on December 6. We had an opportunity to offer comments in the TBT (Technical Barriers to Trade) part of the WTO, about the concerns we have about this system. In fact, that we think it is unworkable, that there are significant aspects of it that are discriminatory. And so this is really a second part of the discussions we are going to have over the course of the day. Again, I do want to add that a third part of the conversation is to try to find a way to really cooperate in finding ways to help developing countries use this technology.

Some aspects of what you described earlier as political reality in Europe would be changed if there were a broader appreciation of the fact that this is technology that really is a crucial part, not a panacea, but a crucial part of the problem of addressing world hunger and raising world incomes in developing countries. That is another reason why I feel a sense of urgency about moving forward on it.

Question:...What is the point of talking to the Commission when it is obvious that member states are blocking, ....why not speaking to the French ....

Under Secretary Larson: You can be sure we are talking to all of our friends in the EU about biotechnology and about our concerns on the present state of affairs. But I have one day, not fifteen days...

Question: What could the Commission do that it has not done yet?

Under Secretary Larson: I am not convinced that there is nothing more that the Commission can do. My most recent detailed conversations on this subject with senior Commission officials go back several months, to the early summer. We have had a relatively brief exchange about it in the context of the Senior Level Coordinating Group. We had an opportunity a couple weeks ago in that tour of the horizon on U.S.-EU relations to have a general conversation, but I wanted to come to Brussels to talk face-to-face with the senior Commission officials who manage this issue. So that I left with a clear(er) appreciation of what they saw as the prospects, what they would be prepared to do to move this forward.

Question: Legally, can the Commission actually push through some of these things that are stuck in the system or...(inaudible).

Under Secretary Larson: I have heard it said that they can legally do that. I donít know enough about the EU apparatus to fully understand that. I certainly will be interested and will be asking some questions about the mechanics of the EU and what possibilities there are available to make progress on this issue.

Question: Ms. Wallstrom will be the first one to tell you that she could take member states to court... In fact, the Commission could take them to court.

Under Secretary Larson: They could, I think you are probably right on both counts.

Question: But the Commission apparently doesnít want to do this and I have talked with some of the companies, here, they are not willing to this because they fear a worse public backlash if it looks like they are sort of forcing people to eat this stuff that they donít want. Would the U.S. be willing to take countries to court?

Under Secretary Larson: I am here to find out first hand what the state of affairs is and then we are going to make some decisions about how we can best move forward. It is fair to say that after three years, patience is wearing out and there is a sense that a lot of approaches have been tried and havenít worked. So I am trying to figure out what plausible approaches is there are to make progress on an issue we think is obviously very important commercially to the United States. Farm trade is very important for the United States, but we do think there is more than that. That it is something that Europe has a strong stake in. We donít think that the present state of affairs is helpful and is reestablishing the credibility of the food safety system in Europe. But we also think that there is a risk of Europe being isolated in what looks like as one of the most important emerging areas of technology.

And finally, we think that the position that Europe finds itself in now is a big problem for developing countries that would like to make broader use of biotechnology in addressing their own agricultural requirements.

Question: If the Commission legally has the right to take these member states to court, which it has not done, and the companies are afraid to do it, there is a legal process in Europe for people suing the Commission for not doing its job. Would the U.S. consider suing the Commission for not doing its job?

Under Secretary Larson: See, I have only been here for an hour and I have already got two or three new ideas about things we can explore (laughter), I am already glad I made the trip.

Question: It seems to me actually that the Commission at this point is so frustrated with the situation that it would welcome the United States filing a WTO complaint as the only way to make things start moving. How close is the U.S. from filing a WTO complaint?

Under Secretary Larson: Let me put it this way. I want to find out what the Commissionís thinking is on all aspects of it. I would be interested to see if the Commissionís thinking reflects the premise of your question.

Question: To get back to something youíve said about the discriminatory, what would be the legal basis of complaint, you said ... ?

Under Secretary Larson: Well, one of the ways in which its discriminatory ó now, weíre of course turning to the labeling and traceability issue -- is the proposal, as it is set forth, would not require labeling of products like wine and cheese that happen to be made in Europe and are produced with processes that use enzymes that are produced with biotechnology. And part of the rationale, as I understand it, is that you canít detect or test for that in the final product. So the wine and cheese wouldnít be labeled as something that was produced with the aid of biotechnology or that was biotechnology. But on the other hand, if you take a product like soybean oil that is widely used in processed food, and is made by crushing soybeans, if they had come from soybeans that were biotech variety is they would need to be labeled as derived from GMOs, a phrase like that.

And even though you can no more detect that in the soybean oil than you can in the wine and cheese. The thinking from our vantage point, there is no logic to that, there is a discriminatory aspect to it and again, looking at it from the standpoint of the credibility of the European system, it is going to be something that, if it were implemented, would undermine credibility because there would be these labels and yet no one can know for sure because it canít be tested for it.

Question: The rules are not discriminatory as such because they would also apply to cheese and wine, and (inaudible) enzymes,... they would also apply to crushed soybeans, in Europe they are all (inaudible)? Would the same things apply as well?

Under Secretary Larson: My point is that it is hard to believe it is an accident that lines were drawn, that the distinctions were made the way that they are and that I do think it is discriminatory in effect -- in the effect that it would have on major product lines based in Europe compared to major product lines produced in the United States.

Question: What then is the alternative? What GM traits should be put on labeling, what should these foods look like?

Under Secretary Larson: We are not an advocate of traceability and labeling for products that would not be in the market if it had not already been determined by the appropriate authorities that they were just as safe as conventional varieties. I think there are at least two issues one has to discuss in answer to a question like yours.

One is if one is talking about products that European food safety authorities have deemed to be just as safe, no more risky than other things that are on the market, then what is the justification for an onerous tracing and labeling regime that covers them and not other products? That is the sort of the starting point. If you want to know what do we really think, our philosophy is that labeling should relate to qualities of the food that are important for nutritional reasons. Or there may be cases where there are allergens and people who are susceptible to those should be able to know form reading a label. But our labeling philosophy doesnít encompass a system where you label to cover a process where thereís been no reason whatsoever to believe that the process produces a product thatís different in any qualitative way with its effect on humans, than others. So that is the sort of the starting point.

Now, having said that, we have confronted within our own system, demands by consumers, for example, organic products, which are products raised without chemical fertilizers, for example, and also which have been defined to be products that are not produced through modern biotechnology. The difference there is that what we have done in order to promote consumer choice is to have a system where producers can offer food that is organic, to have a system implemented by the Department of Agriculture, to make sure that this organic label is not used in an untruthful or misleading way. So that there can be genuine consumer choice and you can walk into almost any supermarket in the United States and go into a section of it where organic foods are being sold. It is a relatively small part of the public demand, eight to ten percent, but for that eight to ten percent, the market has been organized so that there can be genuine consumer choice. It seems to me, if there were an interest in having something that truly offered consumer choice, particularly on an issue that is not deemed to be a safety issue, thatís certainly one thing one could look at.

Question: But surely the debates in Europe have moved beyond the pure safety of the product to consumer choices of the double process and whether we should be using GM technology.

Under Secretary Larson: Well, I was just saying this as a way, if you believe that there is a significant part of your population that wants a choice in that way, there is a demonstrated way to provide it that works and that does not require a burdensome and discriminatory regulatory process

Question: Would you advocate  labeling and traceability  instead for organic products?

Under Secretary Larson: Well, Iím not advocating it at all, but you asked me is there a way that one can offer consumer choice that Ďs different, and I gave you an example.

Question: Even if the EU starts with the approval process tomorrow and starts (inaudible) process tomorrow.... (inaudible) consumers would turn around and say, "Well, I donít want that and farmers wouldnít grow these products because thatís their market pool. You have to....

Under Secretary Larson: There is a market: biotech soybeans are being sold in Europe, biotech corn gluten is being sold in Europe

Question: To the extent that that leads to labeling and traceability problems and the implementation ....(inaudible) .... you would have to wait two or three years before you could expect the EU to (inaudible)

Under Secretary Larson: No, I donít accept that.

Question: If youíre not against labeling organic products, which are again not collectively different from ordinary products, then how can you be against labeling products that contain GMOs?

Under Secretary Larson: First of all, the distinction I am making is that I am not advocating any particular program for Europe. I am saying that our philosophy has been that it should be based on whether it is qualitatively different. But, in accepting the notion that the issue of consumer choice is an important issue, I did say that we have experimented with a model with respect to organic food that has been successful in giving consumer choice. But it is sort of the opposite of the approach that the European Union has suggested. In other words, it is an approach that says, "Ok, here there is a group of people that would say weíre not arguing that this is scientifically unhealthy, thatís the job of the food safety authorities. But we want to be able to buy something that is free of something, that it is not produced with a biotechnology process." Well, thereís a way if thatís the way Europe decided it wanted to go, there is a way to do that, but that means focusing on ó I wouldnít say GMO-free, because I think the realities of the food processing system is that "free" is a standard thatís not going to be met. But you can produce something subject to certain advantitious presences, has been produced without modern biotechnology processing.

The EU process goes in exactly the opposite direction. Itís proposing to label everything that has been produced with biotechnology processes, except for wine and cheese, produced with biotech enzymes, and the European food processing industry has been telling us that that will very likely result in no consumer choice because one of two things will happen. Either theyíll just put a "May contain GMOs" on everything, just to be safe, or keep it off the shelves entirely.

It has been pointed out that this whole regime about traceability and liability is something thatís going to be implemented over a period of time, itís up for discussion for years. I think itís very important during this period of time for the appropriate authorities to really examine, with input from the European food industry, with input from everybody that they want to consult, whether these systems are workable. Many have said that theyíre totally unworkable, and see if there arenít alternatives that provide the sort of consumer choice that would be workable. And we would certainly be more than happy to contribute to that debate. We contributed to that debate in the WTO earlier this week.

But in the meantime, we think itís important to move ahead with the approvals process and we think that is something that ought to happen now.

Question: Would you say your main hurdle now comes down to a public relations problem? And does that make it more difficult than a purely commercial dispute?

Under Secretary Larson: I think it is important for there to be a broader appreciation on the part of the general public that not only are these biotech foods on the market deemed to be safe as anything else thatís on grocery store shelves, but also that biotechnology as an emerging technology, is something that has a tremendously important role to play in addressing the broader global problem of hunger. I mean, 800 million people are malnourished in the world today, according to the FAO.

When you talk to developing countries, countries like China, countries like Kenya, countries like Egypt, they see that this is something that could be a part of a successful strategy to guarantee food security for their people. And theyíre worried that there are efforts being made to over-regulate this in a way that would run the risk of stifling their ability to use the technology. And, I think that is something that has to be a larger part of the public debate.

The United Nations Development Program, in its Human Development Report, each year they come out with a report that talks about human development, and it has all of the indicators on the global basis, of literacy, nutrition, how people are doing. Itís on an individual basis. Itís not about governments or countries, itís just on an individual basis, what is the state of welfare of people around the world. And in this yearís report, in addition to publishing all the data that they published, they came forward with a report that said it is very important for the world to find a way to move forward on agricultural biotechnology, as it is important for human development, itís important for, in particular, the poorer people of the world. So I think, yes, it is important for this discussion to take place in the public arena.

Question: A European will say thatís fine, but weíre not starving here and we donít have food problems here. Why are we being forced to eat this stuff?

Under Secretary Larson: Well, first of all, Europe is part of an international food system that involves international trade and rules and regulations, approaches that you adopt here have an impact around the world. Secondly, Europe has influence in other international fora like Codex Alimentarius, where rules are set for food regulation, if you will, and some of these products that developing countries will make for their own consumption, but some of these are products that theyíre going to make for export, and it will contribute to increasing rural incomes. Not everyone is involved in subsistence farming to feed themselves. There are biotechnology products being developed in Egypt, for example, that could have moved forward a lot faster, except that they know that theyíre not going to be able to market them in Europe in the present circumstances and so they have had to slow down the commercialization phases at work.

Question: Would you be against labels that say "Thereís GMOs in here", but you wouldnít be against a sticker saying, "GMO free"?

Under Secretary Larson: Iím not for or against anything. What I am saying is that the system that is proposed is not going to work, that it is very burdensome, that it is discriminatory in very important ways, and that the net effect of it, if it went into operation, would be to diminish credibility, because it would be shown very quickly not to be delivering the results that it promised. I am pointing out that if the aim is to facilitate consumer choice that there are some other models that could be looked at. I am not here as an advocate of anything, but I am just saying that there is some experience that one can examine from around the world on this issue.

Question: Iím just trying to understand whether you think a GMO-free system would be workable or whether you want the organic sticker?

Under Secretary Larson: No, I am not arguing for any particular sticker and I am not arguing for any particular program. All I am saying is that there has been some experience where the market has been able to work to segregate products that are made with particular processes and that those processes may have nothing to do with the safety of the product, at least according to scientific opinion. But nevertheless, the market finds it useful to organize itself to satisfy that demand, because that demand exists and that governments can facilitate that process by making sure that any type of labeling approach that is established is a truthful one, that itís not misleading, that consumers are getting what they have been told by the label that theyíre going to get. And my only quibble with the GMO-free was that I think it probably would end up being more precise, if one were going in that direction, to talk about "not made with biotechnology" or "biotechnology processes have not been used in the production of this product". But that was only a very technical thing, it wasnít saying, "No, I am for organic and you are for GMO-free". No, thatís not the point.

Question: Would the U.S. start a WTO dispute over the traceability and labeling proposals if they went into effect as they are now?

Under Secretary Larson: I am not going to give you the answer youíre looking for on that. I think on the proposals as they are now, I think they are unworkable and discriminatory and disadvantageous, even for Europe. We are going to be working very hard to convince Europeans that they should take another look at this as it goes through this process that has been described. It takes a couple of years and requires further review in member states and so I see this as a subject where there is time for discussion, debate, and I would hope, for improvement in reconsideration. In the meantime, I think there is a very urgent issue about the biotech approvals process and we hope that that can be restarted very promptly. Thank you.

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